Chevron is expanding its footprint in Venezuela while two of its biggest U.S. rivals remain on the sidelines.
The company says its Venezuelan joint ventures intend to spend more than $7 billion over the next five years. Chevron expects that investment to help double its production to roughly 600,000 barrels per day.
Chevron’s presence in Venezuela dates to 1923. ExxonMobil and ConocoPhillips, meanwhile, have not operated there since the former President Hugo Chávez nationalized their assets in 2007. Both companies are still pursuing compensation tied to those seizures.
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Chevron adds acreage in the Orinoco Belt
Much of the new development will run through Petroindependencia, a joint venture in which a Chevron subsidiary holds a 49% interest.
The venture now has rights to Carabobo-1 and Carabobo-2-South-A, two additional areas in Venezuela’s Orinoco Belt. Chevron says the acreage will add to an operation already producing extra-heavy crude in the region.
The agreements also improve the business terms governing Chevron’s Venezuelan ventures, the company says. Chevron expects its total production costs to stay below $20 per barrel.
Its three joint ventures in the country have already increased production by 15% this year.
CEO Mike Wirth said Venezuela can “compete for investment within our portfolio for decades,” citing the country’s resources and Chevron’s expanded position.
Washington seeks more energy investment
Chevron’s announcement comes amid a broader Trump administration effort to attract new capital to Venezuela’s energy sector.
Wirth credited the administration and the Department of Energy, including Energy Secretary Chris Wright, with helping move additional investment forward.
Wright was in Caracas when Chevron announced the expansion. Reuters reported that potential investors Eni, KEO Capital and Primavera were also preparing energy agreements in Venezuela.
That activity is separate from another plan President Donald Trump announced last week involving roughly one-fifth of Venezuela’s oil reserves.
The administration has also promoted a much larger reconstruction effort aimed at increasing the country’s energy production.
Venezuela produces far less oil than it once did
Despite its vast reserves, Venezuela is pumping considerably less crude than it did two decades ago.
Reuters puts current production at about 1.25 million barrels per day. The country produced more than 3 million barrels per day roughly 20 years ago.
A lack of sustained investment and problems within state-run PDVSA contributed to that decline. U.S. sanctions have also constrained the industry.
Wright said Wednesday he expects Venezuela’s total production to reach 2 million barrels per day by the end of the decade.
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